Tesla Inc. (TSLA) Speeding Its EV Efforts Up In China To Maintain Lead

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Tesla Inc. (TSLA) is gradually increasing the production of electric vehicles at its Shanghai Gigafactory in China. There is very strong competition in the segment of mass-produced electric vehicles in that market, but the plans of the Chinese government are fueling the leadership race.

Last week, officials in China declared their intention to raise the share of zero-emission vehicles in total new car sales to 20% by 2025, up from 5% at present. Therefore, a stronger competition will be there in the Chinese market.


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Almost without facing a fight, Tesla managed to take the lead in the segment of premium electric vehicles and mid-range electric cars in Europe and the United States. In these regions, the promise of electric vehicles was underestimated by traditional automakers, and Tesla quickly became the most successful brand in a new direction. Local companies have developed electric transport in China for a long time. In contrast to the United States, mass production in China began in the cheap car segment. But in the premium market, there are also strong players, such as NIO Inc. (NIO), which in October 2020 doubled its shipments.

There were 11,456 Tesla cars assembled at a local factory in China in July 2020, according to China Automotive Information Net. This is 24% less than it was in June. But these are not official statistics because Tesla does not publish monthly sales details in China. At the same time, the automotive market in China is recovering from a two-year downturn as NIO’s sales were up four times in July. Simultaneously, the Chinese market is being targeted by BMW, Volkswagen and Mercedes-Benz Daimler, who are quickly planning their electric car models.

Local producers are engaged in an aggressive price war, and competing with them is difficult. But Tesla is trying to do so, and a revised version of the Model 3 was seen last week in China with more powerful headlights, double windows and other design changes that first appeared on cars manufactured in China.

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